From Taegan Goddard Comes This
"This family has been tested."
-- Todd Palin, quoted by CNN, saying that his children are ready for a presidential campaign should his wife decide to launch a bid.
Yes, but Todd, you failed the test.
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Tuesday, May 31, 2011
Goldman Sachs Turns $1.3 Billion into $25 million
One Of Its Highest Paid Employees Manages Debacle
The Wall Street Journal today reported in depth on the relationship between Investment Banking Giant Goldman Sachs and Libya. While there are many fine details to the story, the one that caught the attention of The Dismal Political Economist was that in early 2008 the Libyan turned over $1.3 billion to Goldman to manage. About two years later they got back $25 million.
The Journal story goes on to say that
The results engender mixed feelings. On one hand we have further proof that in the world of Wall Street high compensation is not tied to performance, but on the other hand, if someone is going to lose 98% of their investment,
Don't Think Grover Norquist is Dishonest?
Here is Some Evidence
Several people have complained that The Dismal Political Economist has erred in calling Grover Norquist dishonest. So maybe a clarification is appropriate.
The point that was made about Mr. Norquist in the report under attack,
was that Mr. Norquist was not against taxes per se, but was using that rather popular position (after all who is in favor of taxes?) as a stalking horse to hide his real agenda, which would be very unpopular. The real agenda, and Mr. Norquist is open about this, is that he wants to eliminate every social program that the Federal government is involved with. However, were Mr. Norquist to recruit members of Congress to sign a pledge that they would eliminate Federal Agriculture programs, Education programs, Health programs, etc he would fail. But in signing his no tax increase pledge that is exactly what they are doing.
To illustrate here is Mr. Norquist in an Interview with the Harvard Crimson.
Now here is Mr. Norquist on taxes
We should have zero capital gains tax. We should abolish the death tax. We have a corporate tax rate of 35 percent, when the average in Europe is 25 percent. We ought to at least take our corporate tax rate to 25 percent. Our personal tax rate, now at 35 percent, should go to 25 percent. Serfs in medieval Europe were taxed 20 to 25 percent. I don’t think we should be taxed higher than serfs.
Notice how specific he is, he not only identifies which taxes he would cut, but by how much (of course he does not identify the loss in revenue and how it would be made up).
Now here is Mr. Norquist on Government Spending.
I want to drop the government in half over the next 25 years, and then drop it in half again. The government’s about 33 percent of GDP, 33 percent of the economy. We want to take it down to 16 and a half percent, then take it down to eight percent, all of which would take us to where we were at the turn of the century.
Notice the complete lack of specificity. Not a single program is mentioned. Why, because Mr. Norquist and those who would cut the Federal budget always seem to conveniently leave out what they would cut.
The point: No one should be taken seriously on cutting Federal Spending until they are willing to identify which programs they would cut, and to set forth the consequences of those cuts. That would be real honesty.
Mismanagement and Incompetence Reign Supreme at the U. S. Postal Service
And Congress Lends a Helping Hand – Not!
The current issue of Business Week features a story on the financial woes of the U. S. Postal Service,
The U.S. Postal Service Nears Collapse
along with background on how it got to where it is, what other postal services around the world are doing and what the U. S.
There are two items in the article that require commenting on. The first is that its collective bargain agreement with 250,000 American Postal Workers Union contains a no-layoff clause. And not only was that in past contracts, it is continued in the current contract that was signed in March.
Really. A no-layoff clause for an organization at the edge of bankruptcy. A no-layoff clause where 80% of costs are salaries and benefits. A no-layoff clause where the comparable number for Fed Ex is 43% and for UPS is 61%. What were they thinking?
Now normally at this time you would expect the ranting and railing against public employee unions who have received unreasonable terms in their contract. No, the Union is not to blame here. It is a union’s job to advocate for its members. It is management’s job to preserve managerial prerogatives so it can run the business. It is management’s job to say no to contract proposals that interfere with its operating of the business. The blame for this provision lies squarely with management. They needed to say no.
The second point is that apparently the Congress has enacted a provision that prevents the closing of any post office solely for economic reasons. Now that’s a great idea. So the USPS cannot lay off workers, cannot close post offices and cannot generate enough cash flow to survive.
There are other countries that have faced this dilemma. They have reorganized their postal services, eliminated post offices and placed postal services in convenience stores where the post office is operated by private employees of the convenience store, and put new services and feature into the system. They are profitable and sustainable. Why don’t we copy them? Because in America
So Congress and Post Office Management, good luck but we really do not want you coming to the U. S. Taxpayer to bail you out.
Even When Mitt Romney is KInd Of Right
Mitt Romney Just Cannot Win One
A lot of people have been having a lot of fun with Mitt Romney for a lot of years. And Mr. Romney just keeps teeing it up for them.
The latest joke storm out there is the position by the Romney people that argues “that Romney deserves credit for the rebound of the auto industry — even though he opposed Obama’s auto bailout.” as reported by Greg Sargent in the Washington Post.
The problem for Mr. Romney is that he penned a NYT Op/Ed piece in late 2008 that was headlined
By MITT ROMNEY
Published: November 18, 2008
In this comment Mr. Romney suggested a reorganization type of bankruptcy, not a liquidation. The reorganization that Mr. Romney proposed contained many of the actions that were ultimately taken in the auto industry bankruptcy and restructuring the followed. So his claim now that it was his ideas that were implemented has some validity. Of course, a significant difference is that Mr. Romney would have used only government guarantees for new financing, and probably not put government money into the companies. This, however, was required to implement the reorganization, which the Obama Administration did over huge objections of Conservatives, and presumably Mr. Romney so he does not get full credit. A nice grade of B- seems right.
However, Mr. Romney gets no credit at all with the public or the chattering press because of the title of his Op/Ed piece. It strongly implies he wanted to let the companies be dissolved and to disappear, and today that really looks like a bad position to have taken. That was not Mr. Romney’s position, at least not until it became clear that the government had to inject real money into the auto companies, but he gets no credit for being somewhat right.
Strangely, in the odd world of Republican politics the perception that Mr. Romney would have let GM and Chrysler fail and be liquidated will help him in the race for the nomination as it is closely aligned with Conservative policy thinking. But if he wins the nomination, in the general election, don’t expect him to win the state of Michigan
Rick Scott is Unpopular, Palin’s Bus Tour Purpose is Unclear to the WP and . . .
Politics and Economics in the News
Just about 7 months ago Republicans were celebrating the election of Governor’s like Florida
Of course, if Sen. Marco Rubio is nominated for Vice President, as The Dismal Political Economist forecasts here, maybe not so much.
Obama may not be quite the underdog in North Carolina that people think. More important is the comment on how business leaders are imploring the Governor not to accept Conservative driven cuts in education, because education trains their workers and promotes economic development.
You see, Conservatives in Congress who have no experience in the business world say government stands in the way of job creation. Business leaders, those in the real world who actually create jobs know differently.
The Washington Post also has a story with the headline, “Purpose of Palin”s Tour Still Unclear”. They must be the only ones for whom it is unclear. The rest of the world knows the purpose, to focus attention on Sarah Palin. On the other hand the WP reports
Former Alaska
Avoiding the press!!!. Surely a first for the Palin family.
North Carolina BBQ makes an appearance on The Incidental Economist Blog. Someone suggested that given the economic and financial turmoil they might have more important things to write about. Well, there is nothing more important than North Carolina BBQ.
And here’s to NC starting to make the news for things other than basketball.
Monday, May 30, 2011
The Dismal Political Economist Interviews John Maynard Keynes
[Editor’s Note: This interview was difficult to obtain because Mr. Keynes is a very private person who does not like to speak on the record about his work or current economic events. Also, he has been dead for over 60 years.]
Because of the severe nature of the current economic crisis and its implication for the entire globe going forward, The Dismal Political Economist felt that the most helpful thing he could do would be to obtain the views of John Maynard Keynes on the subject. Mr. Keynes is probably the most important economist of the past 100 years.
This interview is presented as a public service.
- Welcome Mr. Keynes, to start off how would you characterize the difference between the Great Recession of 2008 and the Great Depression?
Mr. Keynes: Well the Great Depression was caused by an asset bubble in the stock market and the collapse of the financial services and banking sectors brought on by mismanagement and lack of sufficient regulation. The Great Recession of 2008 was caused by an asset bubble in real estate and real estate financing and the collapse of the financial services and banking sectors brought on by mismanagement and lack of sufficient regulation.
- Your home country,
England
Mr. Keynes: Well yes, if you want to continue to economic conditions of low growth and high unemployment. I assume Conservatives have taken over the Government.
- Well yes, but they say this will restore business confidence and they say that will lead to investment, hiring and economic growth.
Mr. Keynes: Increases in Aggregate Demand lead to higher economic growth. Didn’t they read the book? Business doesn’t invest and hire because they feel good, they invest and hire because they think someone will buy what they are making and selling.
- By book I assume you mean The General Theory of Employment, Interest and Money. Is that material still relevant.
Mr. Keynes: Yes, you people do still read don’t you? For example, it warns against a liquidity trap where monetary policy essentially becomes useless as an expansion tool. I don’t suppose you avoided that, did you.
- Well no, we didn’t. In fact some economists and policy makers are trapped as we speak. How do we get out of the Liquidity Trap?
Mr. Keynes: You use fiscal policy to increase Aggregate Demand. Increasing government spending is the best way to do this, since you can target specific areas, specific industries and specific pockets of unemployment. Once you get the economy jump started, investment and growth will start to take the economy to full employment. Just make sure you do it long enough and strong enough.
- Well Conservatives in the U. S. Congress want to cut government spending and decrease taxes on the very wealthy. Will that work.
Mr. Keynes: Well, not on this planet, maybe in some other solar system. How exactly does firing government employees and firing employees in the private sector who provide service and goods to government return an economy to full employment? And you need tax cuts directed at people who need the money and who will spend it on consumer goods to stimulate, you know, that Aggregate Demand thing again.
Why would you let people like that into government?
- Well, they were voted in because voters disliked Democratic plans to provide universal health care for everyone at an affordable price.
Mr. Keynes:
Why would you let people like that vote?
Greece Greece
Mr. Keynes: Didn’t they read the book? Sounds like they are trying to create a post World War I Germany in Greece
- By book I assume you mean The Economic Consequences of the Peace
Mr. Keynes: Yes, so I assume they didn’t and things are not going all that well.
- Well, the Greek economy is experiencing recession, high unemployment civil unrest, an intense dislike of its own government and other ones and a lot of misery. Is that what you would have expected?
Mr. Keynes: How could anyone expected anything else?
- What would be your final comment to those economic policy advisors and creators in 2011?
Mr. Keynes: Haven’t you people learned anything in 75 years?
First Look at the 2016 Presidential Race
No That is Not a Typo, It is Time to Take a Look at 2016
And Now the Democrats
The Dismal Political Economist had been dismayed that none of the political experts had taken it upon themselves to preview the 2016 Presidential race, so in the public interest The Dismal Political Economist produced what is probably the first, but not last in-depth look at the race. The first report was on the Republicans
and now it is time for the Democrats.
The first thing everyone will notice is that the potential Democratic field is much smaller than the potential Republican field. This reflects several things. One is that the President is like a large shade tree that crowds out the growth of lesser plants, or in this case potential candidates. A second factor is that Democrats do not hold a majority of the Governorships, and do not hold them in states like Florida , Ohio , Texas and Pennsylvania which traditionally nurture Presidential aspirants. The Democrats do hold the Governorships of Massachusetts and California, but surely the Dems have sworn off any candidate from Massachusetts, and Governor Brown of California has been there/done that and is too old to be considered.
So hopefully the pool will get bigger, but right now here is what the Democrats have to look forward to.
Group 1 – The 2008 Contenders:
Barack Obama did not leave as lot of potential 2016 candidates after he won the nomination. John Edwards is gone, for good because he was very, very bad. Two others are possible but not likely.
Hilary Clinton – If Ms. Clinton decides to run she is almost certain to claim the nomination. Her experience as Senator, Secretary of State and former First Lady gives her overwhelming credentials, and her character, charisma and perseverance in the face of losing the 2008 nomination make it almost impossible for Democrats to deny her the 2016 nomination. The question, though is will she run? Age and a desire for a nice retired life probably say no.
Joe Biden – Biden made a hint about running, but by 2016 his age is also a factor and a continuation of the Obama Presidency, which is how he would be perceived are not factors in his favor. He also will likely opt for the comfortable retirement.
Group 2 – The Heavyweight
If Ms. Clinton does not run there is one person who will be the odds on favorite.
Andrew Cuomo – Assuming Gov. Cuomo wins re-election in 2014, and there does not seem to be a Republican who can challenge him effectively, he will be a strong candidate in 2016. Re-election to office is usually a requirement for obtaining Presidential like status (Obama is the exception) and given his heritage, his previous stint in the Clinton Administration and some success in governing what is an almost ungovernable state, Cuomo would be a formidable candidate. With Wall Street in his back yard, money would not be a problem.
Group 3 – The Potentials
Chuck Schumer – Sen. Schumer has enough ambition for several pols, and would certainly like to be the first Jewish President. If Cuomo does not run, look for Schumer to give the race considerable attention.
Richard Durbin – Sen. Durbin is getting a good reputation in the Senate, and would be an attractive candidate. He comes across well on television, a key factor.
Mike Beebe – The Arkansas Governor would follow the tradition of Arkansas Governors running for the Presidency. In fact, it is almost required.
John Hickenlooper – The Governor of Colorado has a “can-do” reputation, would represent a western candidate and if his term as Governor is successful he would be a natural candidate. Question – Is America ready to vote for a man named Hickenlooper?
Group 4 – The Long Shots
One thing about political prognostication is that the one person that is never mentioned is the one to watch. Here are some of those.
Peter Shumlin – The Vermont Governor may have presided over a health care reform for his state that has a successful single payer state operated program. Heavy stuff for the Democratic Party
Lincoln Chafee – An Independent, Governor Chafee of Rhode Island could register as a Democrat and tout himself as bi-partisan to a nation tired of partisan bickering.
Brian Schweitzer – Montana
Jeanne Shaheen – The New Hampshire Senator has also been a successful Governor, and being from New Hampshire
Mark Warner – A moderate Senator from Virginia
Tom or Mark Udall – The Senators of New Mexico and Colorado
Why Social Security and Medicare Cannot go Bankrupt - Really
Understanding What Bankruptcy Means With Respect to These Programs
It is popular for parties on all sides of the issue to come forth with statements that the two major entitlement programs provided by the Federal Government, Medicare and Social Security will go bankrupt unless they are changed. Rep. Eric Canton (R, Va) is quoted in Politico
"As far as Medicare is concerned, there’s a simple choice here - either we’re going to save the program or let it go bankrupt."
and George W. Bush frequently pushed his privatization of Social Security by saying the program would be bankrupt. Democrats are equally culpable in this regard.
The purpose of such statements is illustrated by the Cantor quote, which is to say either take our alternative or the programs will go away. Of course, like almost all political rhetoric, this is simply not true.
Medicare and Social Security are funded by payroll taxes, with equal contributions from employees and employers. The money is deposited into a Trust Fund. Benefits are then paid out of the Trust Fund. The Trust Funds currently have balances in the hundreds of billions of dollars.
Now most forecasts are that the Trust Funds will be exhausted at some point in the future. This is because benefits provided by politicians are not actuarially tied to the taxes that pay them. After all what successful politician hasn’t voted for increases in benefits and no increase in taxes to fund them. However, when the Trust Funds have a zero balance, it does not mean the programs are not being funded, it means that they are not being funded at the level needed to pay for all the promises.
Money will come into the Trust Funds every year from payroll taxes, just not enough to pay statutory benefits. For Social Security, if nothing changed this might mean benefits being paid at 75% to 80% of statutory levels. For Medicare, this number is unknown because of uncertainty over future medical costs, but it is probably in the same range. And so the worse case scenario, which assumes Congress does nothing to change Social Security and Medicare funding means simply that the programs continue with lower benefit payments.
Mr. Cantor is wrong, which is not an unusual event. The choice is not between “saving Medicare which his party’s program does not do (see The Dismal Political Economist’s comment on the Ryan Plan) and letting it go bankrupt.. The choices are between (A) fully funding Medicare, (B) changing its structure and benefits, (C) eliminating the program and replacing it with something else (The Ryan Plan) or (D) the default choice, which is to continue the program as is with a lower level of benefits.
If nothing is done (D) will be the option selected. Neither Social Security nor Medicare will go bankrupt and disappear. Once this is understood discussion on the future of Social Security and Medicare can take on a much more rational tone, although that’s a pretty unlikely event.
Utah Returns to the Gold Standard, Germany Goes Cold Turkey on Nuclear Power . . .
And OtherNews That Needs Commenting On
The NYT reports on Utah’s Law to Encourage Spending with Gold and Silver. Yes, they want people to use gold and silver coins instead of, you know, paper bills, credit cards, checks and all that other new fangled stuff. A spokesman for the U. S.
“the new law “is of no real consequence,” and is purely symbolic”
But that of course does not stop true believers
“This is an incremental step in the right direction,” said Lowell Nelson, the interim coordinator for the Campaign for Liberty in Utah Utah
In other news in Utah
The Financial Times is reporting that about the only way that Greece
Officials involved in the discussions believe far more than €50bn could be raised in sales of state-owned assets, with estimates ranging from €250bn to €300bn – or almost all of Greece
The Dismal Political Economist has already described how the sale of assets, without accompanying reforms is only a short term fix,
The FT also reports that the Europeans might take over tax collection in Greece Greece
Finally, the Boston Globe has the first of a series on articles on Mitt Romney and the health care law in Massachusetts
Sunday, May 29, 2011
First Look at the 2016 Presidential Race
No That is Not a Typo, It is Time to Take a Look at 2016 –
First Up, The Republicans
[Editor's note: The comments on the race have been updated, see
[Editor's note: The comments on the race have been updated, see
The Dismal Political Economist has been looking constantly at the political press reporting but for some unknown reason he has seen nothing about 2016. Assuming Mr. Obama is re-elected, the 2016 contest promises to be a wide open affair, with no candidate being an incumbent President or Vice President (sorry Mr. Biden). Also, it is the major opportunity for the Republicans to regain the Presidency and it is somewhat likely they can, given the country’s record of tiring of one political party in the White House after 8 to 12 years.
[For a Look at the Democrats See Here]
[For a Look at the Democrats See Here]
So who looks to be the major Republican Candidates in 2016? Well, they will come from several groups.
Group 1 – The Leftovers from 2012:
Successful races for the nomination tend to be persons who have run before, see John McCain, Robert Dole, Ronald Regan, George H. W. Bush etc. with George W. Bush being the exception. So the first place to look for the 2016 nominee is someone who has been through the process earlier.
Out of the picture will be Mitt Romney, because of age, and the fact that going for it a third time makes him start to look like Harold Stassen. (note to Newbies, Stassen was a Minnesota Governor who ran for the nomination so many times he became a national joke). Newt Gingrich is also out for reason all too obvious. In contention would be
Tim Pawlenty – Name recognition and experience in the campaign, and the public exposure from four years as host of a Fox News Show.
Jon Huntsman – Same thing, except for the Fox News thing.
Ron Paul (or Rand Paul)– Ron doesn’t care if he looks like Stassen and Rand doesn't seem to care if he looks like Rand Paul.
Herman Cain – Somebody has to bring the pizza
Group 2 – The VP Nominee from 2012
Being nominated for Vice President automatically thrusts a person into the Presidential sweepstakes the next time around, even if that person is on a losing ticket.
Marco Rubio – The Dismal Political Economist believes that Mr. Rubio was destined to be the 2012 VP nominee the day he took the lead in the polls in his race for Senator from Florida Florida
John Thune – A Senator who declines to run for the top spot is automatically in contention for the second spot.
Mitch Daniels – Same for a Governor, and he brings successful state government fiscal management to the table.
Lindsey Graham – A southern somewhat moderate Senator from South Carolina
Jeb Bush – He could easily get the call for VP in 2012. Bush fatigue is fading and he brings Florida
Nikki Haley – The female governor of South Carolina
Group 3 – Those mentioned in 2012
Just being mentioned as a potential candidate confers Presidential gravitas on a person. For those mentioned in 2012 who didn’t run, 2016 could be the time.
Sarah Palin – For reasons that do not need to be repeated.
Mike Huckabee - He is building a following, and could look pretty good to a lot of voters
Bobby Jindal – The Governor of Louisiana
Paul Ryan – He represents the thinking wing of the Republican Party, even if the thinking is not all that correct.
Bob McDonnell – The Virginia Governor will have completed a successful term (no second terms in Va.
Chris Christie – The Governor of New Jersey
Group 4 – Republican Governors
Normally being Governor of Michigan, Florida , Ohio and Wisconsin
The Dismal Political Economist’s Prediction: Can’t say, it’s impossible to predict these things that far out. Why would anyone even write about 2016?
Next Up: The Democrats
Grover Norquist and Balancing the Federal Budget
He is an honest man, but a very dishonest one
Grover Norquist is one of those Washington
Mr. Norquist’s claim to power dates from about 20+ years ago where he decided that all tax increases were evil. To prevent this evil from taking root, his organization, Americans for Tax Reform, or ATR, has asked office holders at all levels of government to sign a pledge that they will not raise taxes under any circumstances, for any reason at any time. To date, almost all House and Senate Republicans (along with a handful of Democrats) have signed the pledge.
Now there are two honest parts to Mr. Norquist. One is his public position that the pledge is absolute, and that he will tolerate no deviation from it. If an office holder violates it, Mr. Norquist and his powerful organization and allies will work to defeat that office holder, even if it means electing someone whose position is diametrically opposed to theirs. This is true integrity, and deserves some admiration.
The second honest part of Mr. Norquist is that he states openly and plainly that his goal is to shrink government. He would like to halve the Federal Government as a percent of GDP, and then halve it again. Essentially his goal is to return the Federal Government to its role at the time it began. He has no concerns, no cares, no problems no issues with what this would entail. He is rock solid in pursuit of this goal, and again this is true integrity and deserves some admiration.
Where Mr. Norquist is totally dishonest is in his use of the anti-tax method for pursuing his goal. He is not anti-tax for the sake of being anti-tax, he is anti-tax in order to reduce revenues to say 14-15% of GDP, and then use that to force spending to that level. To see what that entails, we have the following table.
Balancing the Federal Budget in 2011 | |
(Amounts Rounded for Presentation Purposes) | |
Forecast:( $ millions) | |
GDP 2011 | 15,080,000 |
Receipts | 2,175,000 |
Percent of GDP | 14.42% |
Total Expenditures | 3,820,000 |
Percent of GDP | 25.33% |
Cuts to Balance Budget | 1,645,000 |
Candidates for Expenditure Reductions | |
Government Spending 2011 Forecast | |
(in Millions of $) | |
Foreign Aid | 20,000 |
Science and Space Technology | 31,000 |
Energy | 11,600 |
Natural Resources/Environment | 44,000 |
Agriculture | 21,400 |
Transportation | 92,000 |
Mortgage Credit | 36,000 |
Community Development | 24,000 |
Education and Social Services | 128,000 |
Health Care & Services | 370,000 |
Housing Assistance | 59,000 |
Food & Nutrition Assistance | 95,000 |
Veteran Benefits | 108,000 |
Total Social Programs | 1,040,000 |
Amount Needed from Other Programs | 605,000 |
Percent of GDP | 4.01% |
Source: OMB, President’s 2012 Budget
For 2011 (FY), the government estimates that tax revenues will be 14.4% of GDP, right where Mr. Norquist wants them. Expenditures are much higher, and the resulting projected deficit is $1.645 trillion.
Now if Mr. Norquist can keep revenues at 14.4%, then to balance the budget we would need to completely eliminate all of the departments and related expenditures listed in the table. But wait, even this would not get to a balanced budget. There is still another $600 billion to go. Prime targets, Social Security, Medicare and Medicaid.
Eliminating those programs is what Mr. Norquist wants to do, that is his ultimate goal. If he were truly honest, he would require the office holders to sign pledges that they would eliminate the programs listed above, because that is his actual goal. If Mr. Norquist were honest, his pledge would require the signers to pledge to totally defund Federal aid to Education, Protection of the Environment, Energy, Veterans, Health Care, Agriculture and so on, because that is what he wants from them.
But Mr. Norquist knows that no office holder will do so, it is electoral suicide. So in getting his adherents to sign a “no new taxes” pledge he accomplishes his objective, while he and his elected supporters give the impression they are just against tax increases, a much more palatable position than voting against Veterans Benefits, Education, Health Care, etc. If Norquist and those who signed his pledge were truly honest, and allowed the public to truly understand their policy goals, there would be no support for their position.
Notice that in some of the recent budget/revenue proposals Republicans have talked about a goal of taxes and spending at about 18% of GDP, about 4 percentage points higher than the current level of revenues. To meet this goal, a balanced budget at 18% of GDP revenues and spending would still require elimination of all of those programs listed. At least that would not need the other $600 billion that Mr. Norquist’s goal needs.
Finally, this is a static analysis. In a dynamic Keynesian world, the world in which we live, fiscal contraction at this level would put the economy into a severe depression. The result, even meeting the Republican goal would not balance the budget; it would only cause deprivation, suffering, and economic destruction. Their program is the Neutron Bomb of fiscal policy.
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